Economists and politicians, during this inevitable global society transition phase, must rethink the links between ethics and development because without democratic and moral institutions, no development would seriously be even envisaged.


As we have learned from the founders of economics science, e.g. political economics, that since natural resources are only an ancillary means of creating the illusion of virtual wealth, work is the only foundation of all wealth of a nation and speculative actions based on immorality, could destroy a nation.

Links between morality and multi-dimensional development

The global economy in this 21st century is characterised by the interdependence of economies and societies, living in a glass house, because of the revolution in the field of telecommunications.

No country can escape it, if new mechanisms of supranational regulation are not put in place to rehabilitate the real sphere, the currency being at the service of the economy and not an instrument to dominate it.  So of course, as part of a competitive global economy considering global comparative advantages and having to link economic efficiency with profound social justice – economists will talk about fairness.

Today, we are on the verge of a new transition from global society, with profound geostrategic upheavals, which will entail painful social adjustments and thus a new social regulation to avoid exclusions.  ‘Everyone for oneself’ would be suicidal with disastrous conflicts.  For this, politicians and economists need to rehabilitate a strategic factor of development, morality.  For there are inextricable links between sustainable development and morality – in fact, the reward of effort – and a fight against corruption in its various forms.  The foundation of all global crises or the development of societies is not only explained by the economy but also reliable data.  In the line of the teachings of Plato and Aristotle on the moral of rulers, the contribution of Ibn Khaldun (1), pioneer of modern social sciences is of great scope on both scientific and operative given the current global crisis.  Explaining the numerous chairs of teaching in Europe and the USA, it developed a theory of history centred on the great movements of society where its theses are exposed in the long methodological introduction (nearly 1000 pages), known as “ Muqaddima”, of the work to which he worked for thirty years, i.e.  Kitâb Al ‘Ibar or The Sample Book or Book of Considerations on the history of Arabs, Persians and Berbers.  For Ibn Khaldun, the study of a society implies what three dimensions that are analysed jointly:

  • The economic dimension, the needs of human groups and how to satisfy them;
  • The cultural dimension which includes the regulation of social relations, but also the use of techniques, the arts and science;
  • Finally, the political dimension, the power within the groups and the central power at the level of Global society.

The author clearly shows that most of the dynasties had the same fate: founded by a tribal group that was able to seize the central power, having experienced a period of prosperity and then a period of decay until another tribal group acquired enough strength and maturity based on the moral to seize in his turn the central power.

Ibn Khaldun distinguished five phases.

  • In a first phase, the leader of the tribal group, founder of the dynasty consolidates his power, supported by a strong ‘açabiyya and getting the allegiance of increasingly numerous tribal groups.
  • During the first two phases, politics dominates and allows for some economic development.
  • In the fourth phase, the power is strong, the perception of taxes promotes certain prosperity; the architecture, the techniques, the arts and the letters grow, and the people are living in certain ease.
  • In the fifth phase, self-satisfaction is recognised, and the dependency on physical assets established;

Spending will undermine the public purse especially as the men in power tend generally to surround themselves by characters who are principally looking for material profits. Taxes are rising, and the population is impoverished. Discontent settles in, and the dynasty would lose the support of its people, which will allow another tribal group endowed with a strong ‘açabiyya and nourishing a political project to seize in its turn the central power and to found a new dynasty.

This decadence is mainly due to the lack of morality.  It is in the same philosophical thought that Adam Smith (2) the founder of the modern economy has highlighted the dialectic links between morality and wealth of nations. He taught morale at the University of Glasgow and published in 1759 The Theory of Moral Sentiments. His The first book, the object being to define the principles of morality, seize the virtues necessary for the proper functioning of society and understand where the moral sense comes from, his work highlighting the crossroads of economics and moral philosophy.  Karl Marx will deepen these fundamental contributions in the Capital, Joseph Schumpeter in Reforms and democracies and between 1990 – 2018 most Nobel Prize winners in economics were awarded to the institutionalist.

Morals and democratic institutions considering the social specifics (3)

At an international meeting organised by the European Union, in Malta on December 24 through 26, 2011, attended by important international personalities, and in which we discussed these links, with the future of the Arab and Mediterranean economies.  Many participants from both shores of the Mediterranean have highlighted the fact that the establishment of new democratic institutions causes, in the short term, an economic slowdown, gives the impression of anarchy for the supporters of power because destroying their privileges, but with medium and long-term hope for the entire population.  The new institutions and economic reforms are destroying the old logic of the system, often based on informal, personalised relationships, not on institutions. It had been pointed out during this important meeting that Islam is a religion of tolerance, not being able to assimilate itself to intolerance and extremism which leads to terrorism which is nourishing itself of the planetary threat of misery and lack of morality of the leaders.  The chauvinistic speeches, confusing patriotism and chauvinism nationalist of some leaders denouncing “conspiracies from the outside”, no longer carries in a population with a growing majority, open to the world.

Moreover, it had been affirmed in conclusion that both global and internal upheavals in these regimes are the consequence of dictatorships and authoritarianism that have become, in a complex world, severe threats to the sovereignty and independence of these countries and, in general, to global security.  However, it is necessary to recognise for narrow interests; developed countries do not necessarily favour this trajectory.  It is in this context that the functioning of the international economic and political system must be rethought imperatively the policies of the West’s complacency towards these dictatorships which threaten global security.  It implies more morality on behalf of the leaders of the West because if there are corrupt, there are corrupters.  However, if we must not be utopian: the rule of law does not necessarily overlap with the concept of western democracy as we have seen from historical experiences (see the experience of South Korea).  Indeed, democratisation does not happen by a magic wand, it will take time, as has been the case in the west and some countries in Asia and Latin America.  Democratisation will move forward by power relations both at the internal levels (Conservatives / Reformers) than international.  The Democratic institutions considering the anthropology of societies as brilliantly illustrated by the Indian economist Nobel Prize laureate Amartya Kumar SEN will eventually achieve the symbiosis of Citizens / States in the context of a more participative and humanised society.  Often called “good governance and the rule of law”, without credible morals and institutions, which must take cultural morphology and history specific to each company, posing necessarily the issue of the independence of justice, of the anti-corruption struggle, there can be no development and it is a universal law that applies to all countries.

In summary, for Algeria, institutional and micro-economic reforms must be part of the framework of a clearly defined strategy considering the transformation of the world, that can only come from the interior brought by new reformist social forces that will remove some power segments from where those strong resistance pockets of the rentier’s and their supporters.  The Forum Mediterranean of the Institutes of Economics (FEMISE), published it and to a few years a report of a hot news in this month of October 2018 citing Algeria: “Despite the optimism of the public authorities fuelled by the euphoria of oil prices, Algeria has yet to find a model of growth that can reduce inequalities, unemployment and poverty.”  As well Algeria has two choices: to make efforts to reform its institutions and the economy towards more democracy and transparency or to regress to a protectionist attitude. So, there it always comes down to morality, (the virtue of labor closely linked to the rule of law and the democratisation of society, especially those responsible for giving an example if they want to mobilize their population and overcome the current entropy and enable the country to develop depending on its potential, and these are enormous.

Paris on October 26, 2018

Dr Abdulrahmane Mebtoul, ademmebtoul@gmail.com

Notes

  1. Ibn Khaldoun, (May 27, 1332 – March 17, 1446) as better known than his full name Abu Zaid Abdul-Rahman Ibn Mohamed Ibn Khaldun el-Hadrami, is a historian, philosopher, diplomat and politician. He was one of the first theorists in the history of civilisations per the analysis of the social and political changes he observed in the Maghreb and Spain of his time being at the forefront of sociology and one of the founders of political sociology.
  2. Adam Smith (June 5, 1723 – July 17, 1790), is a philosopher and the father of modern economic science. He had in 1759, published a Theory of Moral Sentiments, where we find this idea that every man, under the principle of “sympathy”, aspires to the greatest possible happiness of the greatest number of men possible. His main work, however, published in 1776, was on “The Wealth of Nations” and this is one of the founding texts of modern economics.
  3. Institutionalism is an economics thinking trend that emerged in the US at the beginning of the 21st century, under the impetus of mainly the writings of Thorstein Veblen, John Rogers Commons and Wesley Clair Mitchell, focusing understanding of the role of institutions in shaping economic behaviour, integrating the work of the substantivism developed by Karl Polanyi.